Town of Selbyville, DE Police Pension Fund

The Council does hereby establish for the benefit of all full-time police officers (as described in Subsection A, below, and thereafter referred to as "officers") of the Town of Selbyville the following Policemen's Nonqualified Deferred Payment Plan (hereinafter referred to as the "plan") to be administered by a Committee (hereinafter referred to as the "Committee") of no less than three persons (none of whom shall be full-time police officers) as the Council may from time to time appoint:

All amounts received from the Treasurer of the State of Delaware pursuant to Title 18 of the Delaware Code, Sections 707 to 710, shall be allocated on a per capita basis to all police officers who, on the date such amounts are received by the Council, are full-time police officers and at least 21 years of age; provided, however, that no full-time police officer who is 60 years of age or older when the first such allocation would be made on his behalf hereunder shall be covered by this plan and provided, further, that any police officer otherwise automatically covered by this plan shall continue to be entitled to an allocation on his behalf during any authorized, temporary leave of absence from duty for a period not exceeding one year. All amounts thus allocated shall be used by the Council and applied by the Committee to provide the deferred payment benefits hereinafter specified. To assure the Council's receipt of the maximum amount available from the State Treasurer on an annual basis, the senior officer in charge of the police department, on or before the first day of April each year, shall comply with the registration requirements set forth in Section 710 of Title 18 of the Delaware Code and provide the Committee with a conformed copy of the information thus caused to be filed with the State Treasurer thereunder.

To help meet the cost of the deferred payment obligations under this plan, the Committee shall purchase from Metropolitan Life Insurance Company (hereinafter called the "insurer") life insurance policies and/or annuity contracts on the life of each officer as each such officer shall from time to time, in writing, direct, with aggregate annual or other premiums equal to the aforesaid amount allocated to each such officer. It is the intention of the Council that all such amounts shall be applied by the Committee to the purchase of such policies and/or contracts; and in the absence of a direction by an officer, the Committee shall purchase an annuity contract on the life of such officer. Nothing herein shall be construed to give any officer at any time a security interest in any such policy or contract on his life. The Town of Selbyville shall be the sole owner and beneficiary of all such policies and/or contracts and shall have the exclusive right to all benefits therefrom. Nothing herein shall be constructed in such a way as to place any such life insurance policies and/or annuity contracts in trust with the Committee, the Council or the Town of Selbyville for the benefit of any officer. All contracts and/or life insurance is to benefit the Selbyville police officers only, and will not be available to meet the Town's general obligations or other debts of the Town.

[Amended 10-1-2001]

In the event of an officer's death either before or after payments hereunder commence, the Committee shall make such payments as may be required by Subsection D or E below, whichever applies, to any person the officer has, in writing, designated as his beneficiary. An officer may change his beneficiary designation from time to time at his pleasure either before or after payments hereunder commence. Such change shall be accomplished and become effective upon the Committee's receipt of a written notification from the officer. In the absence of a written designation of beneficiary, an officer's spouse, if any, at the time of his death shall be deemed his designated beneficiary.

Commencing with the first full calendar month following an officer's retirement, the Committee shall make monthly payments to such officer for the remainder of his life with a total minimum guarantee of monthly payments to the officer and his designated beneficiary for 120 months. Such payment shall be equal in amount to what would be the settlement option described above in this subsection with respect to all life insurance policies and/or annuity contracts on the officer's life. Whenever the commuted value of amounts which would be payable by the insurer to the Committee under this subsection shall be less than $10,000 as of the date which would be the starting date of the full 120 payments, pay in one lump sum an amount equal to such commuted value. If the event which would require payments under this subsection to commence should occur on or after the date of actual receipt from the State Treasurer of any payment described in Subsection A above, but before the date the Committee actually applies the amount which is or would be allocated to the officer with respect to whom benefits hereunder have become payable to the life insurance policies and/or annuity contracts on the life of such officer, then an amount equal to the per capita allocation to such officer, but not applied to the life insurance policies and/or annuity contracts on his life shall be paid in a lump sum, in addition to the benefits otherwise payable under this subsection, to whomever is entitled to receive such benefits otherwise payable hereunder. For purposes of this subsection an officer who is on an authorized, temporary leave of absence from duty for a period not exceeding one year will not be deemed to have terminated his employment until he gives notice of his intent not to return to duty or until he fails to report for duty upon the expiration of his authorized, temporary leave of absence, whichever first occurs; provided, however, that employment will be deemed to have terminated for purposes of this subsection when an officer departs on an authorized leave of absence for an indefinite period or for a period exceeding one year or as soon as it becomes payable by the insurer to the Committee at the insurer's settlement rates in effect on the date of the officer's retirement if the Committee were to purchase from the insurer all the life insurance policies an/or annuity contracts designated by the officer, or otherwise, pursuant to Subsection B above and if, upon the officer's retirement, the Committee were to elect settlement of all such policies and/or contracts under an option providing for equal monthly payments for the life of the officer with a total minimum guarantee of 120 payments. If an officer should die after payments by the Committee hereunder commence, and if such officer's designated beneficiary survives such officer, then the Committee shall promptly ascertain and pay in one lump sum to such officer's estate an amount equal to what would be the commuted value of remaining amounts payable by the insurer to the Committee as if the Committee had elected the settlement option described above in this subsection with respect to all life insurance policies and/or annuity contracts on the officer's life.

If, before his retirement, an officer becomes totally disabled to perform further services as a member of the police force of the Town of Selbyville, dies or otherwise terminates his employment for any reason, then commencing with the first full calendar month following whichever of such events first occurs, the Committee shall make a total of 120 equal monthly payments to such officer, or his designated beneficiary in the event of death. Such payments shall be equal in amount to what would be payable by the insurer to the Committee at the insurer's settlement rates in effect on the date of such occurrence if the Committee were to purchase from the insurer all the life insurance policies and/or annuity contracts designated by the officer, or otherwise, pursuant to Subsection B above and if, upon the occurrence of the event requiring the commencement of payments hereunder, the Committee were to elect settlement of all such policies and/or contracts under an option providing for 120 equal monthly payments. If an officer should die after payments by the Committee hereunder commence, and if such officer's designated beneficiary should thereafter die before the Committee makes the final monthly payment payable hereunder, then the Committee shall promptly ascertain and pay in one lump sum to the beneficiary's estate an amount equal to what would be the commuted value of remaining amounts payable by the insurer to the Committee as if the Committee had elected the settlement option described above in this subsection with respect to all life insurance policies and/or annuity contracts on the officer's life. If an officer should die so as to cause the Committee's payments hereunder to commence or after payments by the Committee hereunder have commenced but before the Committee has made the 120th payment payable hereunder, and if no designated beneficiary survives such officer, then the Committee shall promptly ascertain and pay in one lump sum to the officer's estate an amount equal to what would be the commuted value of remaining amounts payable by the insurer to the Committee as if the Committee had elected evident to the Committee that an authorized, temporary leave of absence, including authorized extensions thereof, will extend beyond the one-year limit. A police officer shall become 100% vested in the portion of the plan that is considered his account balance, after five full years of covered employment under this plan. Termination of his or her employment prior to the completion of five full years of continued employment will result in forfeiture of his account balance. The forfeited amount will be reallocated to the benefit of the remaining participants in the plan.

The benefits to be paid hereunder shall be in addition to and not in lieu of any retirement or disability benefits otherwise generally provided by the Town of Selbyville.

No officer shall assign, transfer, or in any way encumber the benefits payable hereunder, and any attempt to do so will result in such officer's forfeiture of all rights to such benefits. The obligations of the Town of Selbyville hereunder shall not give any officer a prior claim to any particular asset of the Town of Selbyville. In the unlikely event that an officer under the terms of this subsection should cause the forfeiture of his benefits under this plan, the Committee shall cash surrender all the life insurance policies and/or annuity contracts on his life and add what would be the value thereof to the next payment to be received from the State Treasurer as described in Subsection A above.